Whirlpool Corporation · NYSE:WHR
Whirlpool — Investor Day (December 2014)
103 slides from Whirlpool's investor day presentation, Dec 17, 2014
Slide 1: Investor Day 2014
Investor Day 2014
Slide 2: Welcome & Introductions
Chris Conley Sr. Director Investor Relations WELCOME & INTRODUCTIONS * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 3: Whirlpool Corporation Additional Information
Whirlpool Corporation Additional Information This presentation contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries (“Whirlpool”) that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in
Slide 4: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, which we refer to as “ongoing” or “ongoing business”(1) measures: Ongoing business operating profit, ongoing business operating margin, ongoing business earnings (loss) before income taxes, ongoing bus
Slide 5: 2014 Investor Day – Agenda
2014 Investor Day – Agenda Welcome, Introductions & Overview C. Conley 10:00 a.m. CT Vision: The Best Branded Consumer Products Company J. Fettig 10:10 Regional Deep Dives 10:30 Asia M. Todman (20 min) Europe, Middle East & Africa (EMEA) M. Bitzer (20 min) Latin America Region (LAR) M. Todman (15 mi
Slide 6: 2014 Investor Day – Management
2014 Investor Day – Management Jeff Fettig Chairman and Chief Executive Officer Marc Bitzer Vice Chairman Michael Todman Vice Chairman Larry Venturelli EVP and Chief Financial Officer
Slide 7: 2014 Investor Day – Management
2014 Investor Day – Management Joseph Liotine EVP and President, North America EVP and President, Europe, Middle East and Africa Esther Berrozpe João Brega EVP and President, Latin America Ian Lee VP, Asia North Arvind Uppal President, Asia South
Slide 8: 2014 Investor Day – Management
2014 Investor Day – Management Dave Szczupak EVP, Global Product Organization Brett Dibkey VP, Integrated Business Units Dave Elliott GM & VP, KitchenAid Small Appliances
Slide 9: Jeff Fettig
Jeff Fettig Chairman and Chief Executive Officer * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 10: Vision: The Best Branded Consumer Products Company
Vision: The Best Branded Consumer Products Company 2010 – 2014 Growth Margin Expansion Cash Generation 2015 – 2018 30% Larger Global Platform Product and Brand Innovation Best Cost Structure
Slide 11: 2014: A Milestone Of Progress … Not The Destination
2014: A Milestone Of Progress … Not The Destination Ongoing Operating Margin(1) Net Sales Free Cash Flow(2) ROIC(3) 7.3% $20B $650—700M 18% $18B 4.8% $500M 10% 2010 2014 2010 2014 2010 2014 2010 2014 WHIRLPOOL’S 2010 – 2014 TSR OF 153% IS NEARLY DOUBLE S&P 500
Slide 12: A Fundamentally Different Company
A Fundamentally Different Company Doubled in Size Balanced Geographic Mix A Branded Company Global Scale 2000 2014 (Actual) (pro forma) Net Sales $10B $24B N America Sales 60% 44% # of $2B+ regions 2 4 OEM revenue ~20% ~5% # of $1B+ brands 1 7 Plants 43 43
Slide 13: A Balanced And Leading Geographic Portfolio
A Balanced And Leading Geographic Portfolio #1 #1 #1 Western Company #1
Slide 14: Leading Consumer Position In Key Countries
Leading Consumer Position In Key Countries WHR Revenue (2013 Proforma) Market Share WHR Revenue (2013 Proforma) Market Share U.S. Brazil China UK Canada $8.6B $3.0B $1.1B $0.9B $0.9B #2 #3 #4 #2 #3 #4 #1 #2 #3 WHR WHR WHR WHR #2 #3 #4 WHR #2 #3 #4 France Russia Italy Mexico India $0.9B $0.8B $0.7B $
Slide 15: Strong Brand Equity Targeting 90% Of Consumers
Strong Brand Equity Targeting 90% Of Consumers Premium Mass Value * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 16: Growing Adjacent Businesses
Growing Adjacent Businesses % Net Sales (2014 Forecast) Expand Beyond Grow the Core Extend the Core the Core 80% Top 12 major appliances 13% Directly related to the sale of the core Top 12 appliances 7% New product categories that leverage our unique core competencies, brands, and infrastructure
Slide 17: Vision: The Best Branded Consumer Products Company
Vision: The Best Branded Consumer Products Company 2010 – 2014 Growth Margin Expansion Cash Generation 2015 – 2018 30% Larger Global Platform Product and Brand Innovation Best Cost Structure
Slide 18: Strategic Architecture
Strategic Architecture Vision The Best Branded Consumer Products… in Every Home Around the World Mission Create Demand and Earn Trust Every Day Strategy Product Leadership Brand Leadership Operating Excellence People Excellence Values Respect Integrity Diversity & Inclusion Teamwork Spirit of Winnin
Slide 19: Multiple Paths To Profitable Growth & Margin Expansion
Multiple Paths To Profitable Growth & Margin Expansion Geographic Expansion Product & Brand Innovation Best Cost Structure U.S. industry recovery Indesit transforms European business Hefei Sanyo growth platform Emerging market growth Accelerating global innovation Cadence of new products Margin expa
Slide 20: Growth And Margin Expansion In All Regions
Growth And Margin Expansion In All Regions North America Asia $ B 13+ 12%+ $ B 11 10% ~8%+ 2.5+ 2% 1 2014 Forecast 2018 2014 Forecast 2018 2014 Forecast 2018 2014 Forecast 2018 Net Sales Ongoing Op. Margin(1) Net Sales Ongoing Op. Margin(1) Latin America Europe, Middle East and Africa $ B $ B 10% 11
Slide 21: Target: Double Ongoing Earnings Per Share By 2018
Target: Double Ongoing Earnings Per Share By 2018 2014 Forecast 2018 Goal Net Sales $20B $26-28B Ongoing Operating Margin(1) 7.3% 9.5-10.5% (Including Acquisition Impacts) Ongoing EBIT%(1) 6.8% 9-10% FCF as % of Net Sales(2) 3.25-3.5% 5-6% Ongoing EPS(1) $10.90-11.10 $22-24 2X
Slide 22: 2015 Guidance: A Strong Step Toward 2018 Goals
2015 Guidance: A Strong Step Toward 2018 Goals 2014 Forecast 2015 Guidance 2018 Goal Net Sales $20B $24-25B $26-28B Ongoing Operating Margin(1) 7.3% 7.8-8.2% 9.5-10.5% (Including Acquisition Impacts) Ongoing EBIT%(1) 6.8% 7.3-7.7% 9-10% FCF as % of Net Sales(2) 3.25-3.5% 2.8-3.2% 5-6% Ongoing EPS(1)
Slide 23: Levers To Profitable Growth By Region
Levers To Profitable Growth By Region NAR EMEA LAR Asia Demand growth Emerging market penetration Game changing acquisitions Adjacent business growth Scale & cost productivity gains
Slide 24: Asia
Ay Royalstar # Biz Oy Whirlpool gi)» >
Slide 25: Asia Overview
Asia Overview Strong underlying market growth Hefei Sanyo: Superior growth platform in world’s largest appliance country Product innovation growth in India Global cost advantage 2010 2014 2018 (Actual) (Forecast) (Goal) Net Sales $0.9B $1.0B $2.5B+ Op. Margin 4% 2% ~8%+ (ongoing)(1)
Slide 26: Strong Underlying Demand Growth
Strong Underlying Demand Growth Appliance Unit Demographics (middle class growth rate) Appliance Penetration Volumes M 49.3 36% 22% China CAGR through 2020 26% 16% 13.2 India CAGR through 2020
Slide 27: Hefei Sanyo: Growth Engine In A Crucial Region
Hefei Sanyo: Growth Engine In A Crucial Region Strong Profitable Growth With the Framework to Expand Net Sales Operating Profit $ M $862 $68 $35 $296 2009 2013 2009 2013 Strong manufacturing base - 3 Factories in Hefei - 14 production lines - 8.5m units of capacity - Opportunity for further expansio
Slide 28: Whirlpool And Hefei Sanyo … A Growth Platform In China
Whirlpool And Hefei Sanyo … A Growth Platform In China Hefei Sanyo Strong growth engine Exceptional distribution capability Market penetration Installed manufacturing capacity Whirlpool Global technology leadership Global management Global scale Broad product portfolio #1 Western Company in Asia Str
Slide 29: Strong Sales And Distribution Capability
Strong Sales And Distribution Capability Number Tier 1-4 Tier 5-7 Rural Service of Outlets Penetration Penetration Penetration Centers >30,000 100% 100% ~75% ~70% ~5,500 ~25% ~3,000 ~0 ~500
Slide 30: Hefei Sanyo Financial Impact: China Business
Hefei Sanyo Financial Impact: China Business 2014 Proforma EBIT Margin + Hefei Historically performed with 7-8% EBIT + Opportunity to grow revenues additional 50% + Leveraging existing capacity to facilitate growth + Synergies of ~$35M - Incremental Brand / Product Investments - Impact of PPA Adjust
Slide 31: Globally Advantaged Cost Structure
Globally Advantaged Cost Structure (Monthly minimum wage index) 1.0 0.9 Beijing 0.8 ChangXing 1.2 Hefei Shanghai COST ADVANTAGE FOR LOCAL MANUFACTURING … AND GLOBAL EXPORT
Slide 32: India: Growth With Value Creating Potential
India: Growth With Value Creating Potential ESTABLISHED MARKETPLACE POSITION VALUE CREATING PRODUCT INNOVATION MARKET GROWTH THROUGH PENETRATION
Slide 33: India: Profitable Growth and Leading Position by 2018
India: Profitable Growth and Leading Position by 2018 Net Sales Target Operating Margin Target $ B $0.8+ 8-10% $0.5 6% 2013 2018 2013 2018
Slide 34: Strong Product Leadership in China and India
Strong Product Leadership in China and India India China
Slide 35: A New Era of Growth: Asia
A New Era of Growth: Asia Hefei Sanyo Growth Platform Strong Underlying Demand Growth Product Innovation in India Global Cost Advantage 10x distribution points with substantial growth in Tier 3+ cities Middle class growth Increased appliance penetration levels Innovation in all categories drives rev
Slide 36: Growth And Margin Expansion: Asia
Growth And Margin Expansion: Asia North America $ B 13+ 12%+ 2% 11 10% 2014 2018 2014 2018 Net Sales Ongoing Op. Margin(1) Latin America $ B 10% 11%+ 6+ 2014 2018 2014 2018 Net Sales Ongoing Op. Margin(1) Asia $ B 8%+ 2.5+ 2% 1 2014 Forecast 2018 2014 Forecast 2018 Net Sales Ongoing Op. Margin(1) Eu
Slide 37: KitchenAid
KitchenAid’ Gauknerht i) invesit
Slide 38: Europe, Middle East and Africa (EMEA) Overview
Europe, Middle East and Africa (EMEA) Overview Doubling scale in Europe through Indesit acquisition with winning country, product and brand portfolio $350M in synergies primarily in procurement and product / operating platform Product innovation growth in core and adjacent businesses Geographic expa
Slide 39: Indesit: A Strong Track Record Of Performance
Indesit: A Strong Track Record Of Performance Throughout Europe Solid Financial Performance 2009 – 2013 Average Net Sales $3.7B EBIT $120M EBIT % 3.2% FCF % Net Sales 2.5% #1 in Russia, Italy and the U.K. 8 Factories throughout Europe Strong, low-cost country footprint Product strength in Front Load
Slide 40: Doubling Scale in Europe
Doubling Scale in Europe Business position in Europe (By Unit Volume, 2013 Pro Forma) Before Indesit Acquisition After Indesit Acquisition
Slide 41: … With Winning Country Portfolio
… With Winning Country Portfolio Position in Top 7 Countries Whirlpool’s Country by Size Position Russia Germany United Kingdom France Italy Spain Poland
Slide 42: … With Strong, Complementary Product Portfolio
… With Strong, Complementary Product Portfolio Washing Frontload Cooking Ranges Washer/Dryers Refrigeration Combi Cooking Built-In MWO Washing Top-load SDA
Slide 43: … With Winning Brand Portfolio
… With Winning Brand Portfolio Super - Premium Mass / Premium Value
Slide 44: $350M in Synergies Primarily in Procurement and Product/Operating Platform
$350M in Synergies Primarily in Procurement and Product/ Operating Platform Indesit Acquisition Costs and Benefits Acquisition Costs Cumulative Acquisition Benefits $ M $15 $0 2014 $350 $100 $250 $200 $130 $110 $80 $120 2015 2016 2017 SG&A / Engineering Synergies Product and Operational Platform Pro
Slide 45: EMEA Margins: A Path To 8% And Beyond
EMEA Margins: A Path To 8% And Beyond EMEA Pro Forma Margins ~0.8% 7 - 8%+ ~1.5% ~1.8% ~1.7% 1.9% IND WHR 2014 Pro Forma Op Margin Procurement Synergies Product/ Operational Platform Synergies SG&A / Engineering Synergies Growth (Adjacent Business and Geographic) 2018 Op Margin Goal
Slide 46: Innovative Growth Across Businesses Units
Innovative Growth Across Businesses Units Core Adjacent Businesses Small Appliances Essentials Services
Slide 47: Geographic Expansion Into Middle East And Africa
Geographic Expansion Into Middle East And Africa WHR EMEA Revenue by Segment (2013 Revenues not Including Indesit) Growth Opportunity Africa Middle East E Europe 4.0% 2.5% 10.0% 83.5% W Europe ~80% T6 Appliance Penetration <50% <20% Expected W. Europe Africa Middle East Growth Rate ~1-3% 5-10% 4-6%
Slide 48: Transformative Earnings Potential: EMEA
Transformative Earnings Potential: EMEA Doubling Scale in Europe Through Indesit Impactful Margin Lift of Synergies Product Innovation Geographic Expansion #1 market share position by units #1 in 5 of top 7 countries in 2013 $350M of synergies 7-8% operating margins by 2018 Innovation in all categor
Slide 49: Growth And Margin Expansion: EMEA
Growth And Margin Expansion: EMEA North America Asia $ B 13+ 12%+ + $ B 11 10% ~8%+ 2.5+ 2% 1 2014 2018 2014 2018 2014 2018 2014 2018 Net Sales Ongoing Op. Margin(1) Net Sales Ongoing Op. Mar Margin (1) Latin America $ B 10% 11%+ + 6+ 2014 2018 2014 2018 Net Sales Ongoing Op. Margin (1) Europe, Midd
Slide 50: Mike Todman
Mike Todman Vice Chairman
Slide 51: Latin America Overview
Latin America Overview Underlying demand growth through appliance penetration Growth through product innovation in core and adjacent businesses Expansion beyond Brazil Accelerated leadership in compressors 2010 2014 2018 (Actual) (Forecast) (Goal) Net Sales $4.4B $4.9B $6.0B+ Op. Margin 9% 10% 11%+
Slide 52: Outperforming the External Environment
Outperforming the External Environment Business Environment Volatility LAR Operating Performance Index (100 = 1/1/05) Raw Material Costs Currency Devaluation Trendline Labor Inflation Trendline Jan/11 Nov/14 Units (mils) Ongoing Op Margin(1) 12.9 10% 11.7 9% 2010 2014 2010 2014
Slide 53: Large Appliance Penetration Growth Potential
Large Appliance Penetration Growth Potential Appliance Household Penetration 100% 98% 88% 65% 58% 53% 55% 1% 1% LAR LAR LAR Int’l* Int’l * Int’l * Each percent increase in one category equals ~$150M** in Net Sales for Whirlpool *LAR Int’l Includes: Central America and South America excluding Brazil
Slide 54: Leveraging Innovation to Drive Growth
Leveraging Innovation to Drive Growth Core Dishwashers Beer Coolers Air Treatment Adjacent Water Complete Other Businesses Capsules Beverage* CO2 Accessories + Filter Services *Capsule dispensing in partnership with Bevyz
Slide 55: Opportunity to Expand Beyond Brazil
Opportunity to Expand Beyond Brazil LAR International Net Sales Growth Market Share $1.0 B+ $0.5 B 2014 2018 >40% 15%
Slide 56: Joint Venture to Grow in Colombia
Joint Venture to Grow in Colombia Haceb Overview Net Sales (USD millions) EBIT % 345 316 275 9.5% 9.7% 9.4% 2011 2012 2013 Haceb is #1 in Colombia Experienced and capable management team in family owned business Opportunity Details 50% ownership in manufacturing Joint Venture Washers: Manufacturing
Slide 57: Continued Growth & Margin Expansion: LAR
Continued Growth & Margin Expansion: LAR Underlying Demand Growth Product Innovation Expansion Beyond Brazil Accelerated Leadership in Compressors Sizeable growth opportunity through appliance penetration Innovation in all categories drives revenue and margin growth Product and brand leadership enab
Slide 58: Growth And Margin Expansion: Latin America
Growth And Margin Expansion: Latin America North America Asia $ B 13+ 12%+ $ B 11 10% 10% ~8%+ 8% 2.5+ 2% 1 2014 2018 2014 2018 2014 2018 2014 2018 Net Sales Ongoing Op. Margin(1) Net Sales Ongoing Op. Margin (1) Latin America $ B 10% 11%+ 6+ 2014 Forecast 2018 2014 Forecast 2018 Net Sales Ongoing O
Slide 59: Marc Bitzer
Marc Bitzer Vice Chairman
Slide 60: North America Overview
North America Overview Multi-year demand growth in the U.S. Restructured cost base with ample capacity for growth Balanced distribution Growth through product innovation 2010 2014 2018 (Actual) (Forecast) (Goal) Net Sales $9.8B $10.7B $13.0B+ Op. Margin 5% 10% 12%+ (ongoing)(1)
Slide 61: Multi-year Demand Growth in the U.S.
Multi-year Demand Growth in the U.S. U.S. T7 Industry Units (in thousands) 50,000 ~ +3% ~ +4% ~ +4% 45,000 ~ +5% ~ +5% 40,000 +9% 35,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 62: Restructured Cost Base Enables Margin Expansion
Restructured Cost Base Enables Margin Expansion Margin Expansion from U.S. Demand Growth 100 U.S. Demand (T-6) Whirlpool’s U.S. Breakeven volume 2008 2009 2010 2011 2012 2013 2014
Slide 63: Leading Brands Available Where Consumers Shop
Leading Brands Available Where Consumers Shop Sales Channel Whirlpool Balance of Floor (WHR share in sales channel) 2005 Estimate 2014 Estimate 40% 37% 52% 0% Key Accounts 38% Independent Retailers 37%
Slide 64: Growth Through Product Innovation
Growth Through Product Innovation Core Unprecedented number of innovative product launches Adjacent Businesses
Slide 65: Multiple Levers for Profitable Growth in North America
Multiple Levers for Profitable Growth in North America Multi-year Demand Growth Restructured Cost Base Balanced Distribution Cadence of New Product Introductions +34% industry growth from 2012 to 2018 30% lower break-even point vs. pre-recession Well represented everywhere consumers shop major produ
Slide 66: Growth And Margin Expansion: North America
Growth And Margin Expansion: North America North America $ B 13+ 12 %+ 11 10% 2014 Forecast 2018 2014 Forecast 2018 Net Sales Ongoing Op. Margin(1) Asia $ B ~8%+ 2.5+ 2% 1 2014 2018 2014 2018 Net Sales Ongoing Op. Margin(1) Latin America Europe, Middle East and Africa $ B $ B $6B+ 10% 11%+ 7 8%+ 7+
Slide 67: Recap: Multiple Paths To Profitable Growth & Margin Expansion
Recap: Multiple Paths To Profitable Growth & Margin Expansion Geographic Expansion Product & Brand Innovation Best Cost Structure U.S. industry recovery Indesit transforms European business Hefei Sanyo growth platform Emerging market growth Accelerating global innovation Cadence of new products Marg
Slide 68: Larry Venturelli – Financial Guidance
Larry Venturelli Executive Vice President and Chief Financial Officer FINANCIAL GUIDANCE * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 69: Catalysts for Value Creation
Catalysts for Value Creation Multiple Path to Growth Differentiated Market Position Brand Name Portfolio Best Cost Structure Earnings Diversification Focus on Returning Capital Acquisitions Geographic expansion & U.S. demand recovery Innovative product launches #1 globally & 3 of 4 regions; #1 weste
Slide 70: Target: Double Ongoing Earnings Per Share By 2018
Target: Double Ongoing Earnings Per Share By 2018 2014 Forecast 2018 Goal Net Sales $20B $26-28B Ongoing Operating Margin(1) 7.3% 9.5-10.5% (Including Acquisition Impacts) Ongoing EBIT%(1) 6.8% 9-10% FCF as % of Net Sales(2) 3.25-3.5% 5-6% Ongoing EPS(1) $10.90 11.10 $22 24 2X
Slide 71: Doubling Ongoing EPS By 2018: Multiple Growth Levers
Doubling Ongoing EPS By 2018: Multiple Growth Levers Ongoing Earnings Per Diluted Share (1) $3-4 $22-24 ~$4 Ongoing Cost Productivity $4-5 • Cost & Capacity Reduction Emerging Market Growth $10.90-11.10 • Demand Recovery Adjacent Business Growth Indesit Synergies Hefei Growth 2014 Forecast Acquisiti
Slide 72: Doubling Free Cash Flow Generation
Doubling Free Cash Flow Generation Free Cash Flow(2) $1.5—$1.7B $(0.5)—$(0.6)B $(0.3)—$(0.4)B $1.3B—$1.6B $0.7B 2014 FCF Forecast EBITDA Working Capital Capital Expenditures 2018 FCF Goal
Slide 73: Capital Allocation
Capital Allocation Allocation Considerations Fund the Business Targeted Capital Structure Dividends Share Repurchase M&A Outcome Capital Investment: 3.5% of Sales 1.0 – 1.5x Debt / EBITDA target 25 – 30% Trailing 12 month earnings (guideline) $375M repurchased since Q2 2013 $475M authorization remai
Slide 74: 2014 Financial Guidance: Ongoing EPS
2014 Financial Guidance: Ongoing EPS Diluted EPS GAAP Ongoing(1) Previous Outlook $9.40–$9.90 $11.50–$12.00 Incremental Acquisition Related Expense $(0.87) Currency and New Product Transition Expense $(0.68) $(0.68) Current Outlook $8.00-$8.20 $10.90-$11.10 Free Cash Flow(2) $650-$700 million
Slide 75: 2015 Guidance: A Strong Step Toward 2018 Goals
2015 Guidance: A Strong Step Toward 2018 Goals 2014 Forecast 2015 Guidance 2018 Goal Net Sales $20B $24 25B $26-28B Ongoing Operating Margin(1) 7.3% 7.8-8.2% 9.5-10.5% (Including Acquisition Impacts) Ongoing EBIT%(1) 6.8% 7.3 7.7% 9-10% FCF as % of Net Sales(2) 3.25-3.5% 2.8 3.2% 5-6% Ongoing EPS(1)
Slide 76: 2015 Full Year Industry Demand Assumptions
2015 Full Year Industry Demand Assumptions Region Outlook +4% to +6% Flat Flat +2% to +5%
Slide 77: 2015 Financial Outlook: Key Guidance
2015 Financial Outlook: Key Guidance GAAP Diluted EPS $10.75—$11.75 Ongoing Business EPS(1) $14.00—$15.00 Free Cash Flow(2) $700—$800 million ACQUISITIONS EXPECTED TO DELIVER BETWEEN $1.25 AND $1.50 ONGOING EPS IMPACT IN 2015
Slide 78: 2015 GAAP to Ongoing EPS Reconciliation
2015 GAAP to Ongoing EPS Reconciliation Earnings Per Share GAAP Diluted EPS $10.75–$11.75 Restructuring Expenses (Primarily Acquisition Related) ~2.85 Acquisition Purchase Price Accounting Adjustment - Inventory ~0.07 Investment Expense ~0.24 Pension Settlement Charge ~0.11 Ongoing Business Diluted
Slide 79: 2015 Financial Outlook: Ongoing EBIT Margin Walk
2015 Financial Outlook: Ongoing EBIT Margin Walk Full Year 2014 Forecast 6.8% Price / Mix ~ 1 / 2 Cost and Capacity Reductions ~ 1 / 2 Ongoing Cost Productivity ~ 1 / 2 - 1 and Material Costs Marketing, Technology and ~( 1 / 4 ) - ( 1 / 2 ) Product Investments Currency Impact ~( 1 / 2 ) - (1) 2015 F
Slide 80: Risk Mitigation Plan
Risk Mitigation Plan Acquisition Integration Currency & Material Costs Competitive environment Success with Maytag and Restructuring Plans Proven management teams with dedicated integration support Drive ongoing cost productivity programs Growth beyond core appliances Cost based price increases Leve
Slide 81: Jeff Fettig
Jeff Fettig Chairman and Chief Executive Officer * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 82: Target: Double Ongoing Earnings Per Share By 2018
Target: Double Ongoing Earnings Per Share By 2018 2014 Forecast 2018 Goal Net Sales $20B $26-28B Operating Margin(1) 7.3% 9.5-10.5% Ongoing EBIT%(1) 6.8% 9-10% FCF as % of Net Sales(2) ~3.5% 5-6% Ongoing EPS(1) $10.90 11.10 $22 24 2X
Slide 83: Achieving the Vision
Achieving the Vision The Best Global Branded Consumer Products Company 153% TSR 2010 to 2014 Doubling ongoing EPS and FCF by 2018 World class employee engagement #1 in 3 of 4 regions … the world’s largest #1 western company in Asia #1 in 13 large appliance countries Brands targeting >90% of consumer
Slide 84: Value Proposition: Multiple Paths To Profitable Growth & Margin Expansion
Value Proposition: Multiple Paths To Profitable Growth & Margin Expansion Geographic Expansion Product & Brand Innovation Best Cost Structure Multiple Expansion
Slide 85: Question Answer
QUESTION ANSWER
Slide 86: Logistics & Product Breakout Rooms
Chris Conley Sr. Director Investor Relations LOGISTICS & PRODUCT BREAKOUT ROOMS * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 87: 2014 Investor Day – Agenda
2014 Investor Day – Agenda Lunch 12:45 p.m. Product Breakouts 1 – 3 (20 min each) Region Leads 1:45 – 2:45 Product Breakouts 4 – 6 (20 min each) Region Leads 3:00 – 4:00 Product Breakout Location at WoW Region Leads Name Tag Code 1. Asia North 8th Floor Line Review North Ian Lee 1. Asia South 8th Fl
Slide 88: 2014 Investor Day – Logistics
2014 Investor Day – Logistics You may leave your binder at your table Non-Disclosure Agreements need to be signed and turned in as you leave this general session Electronic devices will be collected prior to viewing our Future Products area Lunch will be served on both sides of the building: Name ta
Slide 89: Thank You
Thank. You Whirl ool CORPORATION
Slide 90: Appendix
Appendix
Slide 91: Reconciliation of GAAP to non-GAAP Financial Measures
Reconciliation of GAAP to non-GAAP Financial Measures We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, some of which we refer to as “ongoing” or “ongoing business” measures, includ
Slide 92: 2010 Full Year Ongoing Business Measures
2010 Full Year Ongoing Business Measures The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before income taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP financial mea
Slide 93: 2014 Full Year Outlook Ongoing Business Measures
2014 Full Year Outlook Ongoing Business Measures The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before income taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP finan
Slide 94: 2015 Full Year Outlook Ongoing Business Measures
2015 Full Year Outlook Ongoing Business Measures The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before income taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP finan
Slide 95: 2018 Full Year Outlook Ongoing Business Measures
2018 Full Year Outlook Ongoing Business Measures The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before income taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP finan
Slide 96: 2014 Full Year Outlook Ongoing Business Segment Operating Profit
2014 Full Year Outlook Ongoing Business Segment Operating Profit The reconciliation provided below reconciles the non-GAAP financial measure ongoing business segment operating profit with the most directly comparable GAAP financial measure, segment operating profit (loss), for the projected full-yea
Slide 97: Footnotes
Footnotes a) During the fourth quarter of 2010, we had a gain of $10 million or $0.08 per share net of tax, related to the sale of a brand. The diluted earnings per share impact is calculated based on an associated income tax impact of approximately $4 million. b) During the second quarter of 2010,
Slide 98: Footnotes
Footnotes e) During the third quarter of 2010, we recorded an accrual of $93 million related to antitrust plea agreements entered into by a compressor subsidiary with the U.S. government and with the Canadian government. The diluted earnings per share impact is calculated based on an associated inco
Slide 99: Footnotes
Footnotes j) During the full year 2014, we recognized expenses of approximately $3 million related to antitrust resolutions. The earnings per diluted share impact is calculated based on an income tax impact of $0 million. k) During the full years 2014 and 2015 we expect to make adjustments to ongoin
Slide 100: Free Cash Flow
Free Cash Flow As defined by the company, free cash flow is cash provided by (used in) operating activities after capital expenditures and proceeds from the sale of assets and businesses. The reconciliation provided below reconciles twelve month actual 2010 and projected full-year free cash flow for
Slide 101: Return on Invested Capital
Return on Invested Capital As defined by the company, return on invested capital is operating profit minus taxes divided by Invested Capital (Total Assets – Non-Interest Bearing Current Liabilities) minus Intangibles. The reconciliation provided below reconciles Return on Invested Capital (ROIC) for
Slide 102: Index of Supporting Data
Index of Supporting Data Slide # Slide Title Source 13 A Balanced And Leading Geographic Portfolio GFK, AHAM, Traqline, Internal Research 14 Leading Consumer Position In Key Countries GFK, AHAM, Traqline, Internal Research 26 Strong Underlying Demand Growth Ernst & Young Study, 2012 Euromonitor, GFK
Slide 103: Index of Supporting Data, cont
Index of Supporting Data, cont Slide # Slide Title Source 56 Joint Venture to Grow in Colombia Superintendencia de Sociedades 61 Multi-year Demand Growth in the U.S. AHAM, Internal Research 63 Leading Brands Available Where Consumers Shop Traqline, Internal Research